Credit Inquiries for Employment

[Flamingo]

Just as a final note here, what the employer did in asking for more documentation on the bankruptcy was highly questionable from a legal standpoint. The law does not permit employers to discriminate against those who have filed bankruptcy except for positions related to Security Clearances or in some finance positions, or those making over 75K annually.
I am not surprised they hastened to cover their tracks and say it was because you had late payments in the previous year, which they can use to not hire you.

The law against BK discrimination is usually null and void in practice, because they can always find another reason not to hire and because most BK filers have bad credit prior to the BK.

It is funny, though because if you chose to you could probably make an issue about them being in violation of the law by even requesting that letter from your BK attorney. Not that I would recommend doing that, because it would be more hassle than it is worth.

The key word to all this is "solely." Under Section 525 of the Bankruptcy Code, one cannot be discriminated against and fired as a current employee "solely" for filing bankruptcy and the same applies for consideration as an employee. Even the smallest non-bankruptcy related reason for employment consideration or termination could be sufficient grounds for an employer to defeat a discrimination claim brought under Section 525 of the Bankruptcy Code.

Most employees or prospective employees are "at will" employees; meaning you can be let go at any time for any reason and you can leave at any time for any reason. The law comes into play if you can prove that you were let go soley for a discriminatory reason...i.e., race, gender, religion, sex., etc. It's kind of hard to prove that a bankruptcy on your credit reports was the sole reason you were not hired when there could have been many applicants for the position with your same, or better, skills and qualifications and if it came down to you and another applicant, the BK could be the item that would push the employer to hire the applicant with a clean credit record.

[HHM]

If you do your Job well, if you are a performer, no one is going to care about your BK. If you are lazy, suck at your job, etc, it won't matter if you filed BK or not.

How is that for some perspective

Focus on what YOU CAN CONTROL, stop worrying about what you can't.

[leena]

That's What I Said...

The key word to all this is "solely." Under Section 525 of the Bankruptcy Code, one cannot be discriminated against and fired as a current employee "solely" for filing bankruptcy and the same applies for consideration as an employee. Even the smallest non-bankruptcy related reason for employment consideration or termination could be sufficient grounds for an employer to defeat a discrimination claim brought under Section 525 of the Bankruptcy Code.

Most employees or prospective employees are "at will" employees; meaning you can be let go at any time for any reason and you can leave at any time for any reason. The law comes into play if you can prove that you were let go soley for a discriminatory reason...i.e., race, gender, religion, sex., etc. It's kind of hard to prove that a bankruptcy on your credit reports was the sole reason you were not hired when there could have been many applicants for the position with your same, or better, skills and qualifications and if it came down to you and another applicant, the BK could be the item that would push the employer to hire the applicant with a clean credit record.

Which is what I already said. It is hard to prove, but the employer in this case was a fool to ask for that letter for the BK Attorney, and went to back peddle on their error with another reason related to the credit report.

I agree completely with you fellow moderator, focus on the stuff you can control, not the things you can't control.

[leena]

I also have to add that all of this emphasis on BK and employment is rather false-the vast majority of people who file BK have lousy credit by the time they file BK, and for an employer who cares that is going to be as bad-or actually worse then a BK. Filing is not generally going to make their employment picture bleaker-and might actually improve it. I was told for instance that the Police Department in my city does not consider a BK one year or older an issue (and this is a security clearance job!)- current outstanding, past due debt=big issue!

[Flamingo]

Which is what I already said. It is hard to prove, but the employer in this case was a fool to ask for that letter for the BK Attorney, and went to back peddle on their error with another reason related to the credit report.

I agree completely with you fellow moderator, focus on the stuff you can control, not the things you can't control.

You and HHM are correct - no one should let a bankruptcy on their credit report stand in the way of applying for any job. A prospective employee is there to work for an employer to make money for that employer; hence, one needs to sell themselves to get the position. There are numerous factors in getting a job - so many people worry about the BK when there are many who have filed and obtained positions in many categories. Back when my two oldest daughters were very young, although it wasn't supposed to matter or you were to be asked, having young children and trying to get a job was difficult due to who would care for the children through the day and would one be available to work late or travel. If one didn't get the job, you wonder if it was due to the children. I applied for a position, actually was asked about who would watch my two young daughters and would I be available in the evenings...I did not get the position and I know it was due to having two young children at the time - the job was for a paralegal position which requires overtime. But then I went to a larger firm and got the position in the blink of an eye and at more money...

[Pizza]

If it is any comfort, your wife probably missed out on working for one of the jerkier employers out there. Personally, as someone not working the financial or Security industry (where these checks have always come with the territory) I would not want to work for someone who does a credit check. It shows an attitude I would rather not deal with.

Very nice, leena.

If somebody DOES manage to get a job working for one of these types, it could do more damage than a BK - by helping ruin one's work history. As I've heard before, "if you're not good enough for them, they aren't good enough for you".

[leena]

You and HHM are correct - no one should let a bankruptcy on their credit report stand in the way of applying for any job. A prospective employee is there to work for an employer to make money for that employer; hence, one needs to sell themselves to get the position. There are numerous factors in getting a job - so many people worry about the BK when there are many who have filed and obtained positions in many categories. Back when my two oldest daughters were very young, although it wasn't supposed to matter or you were to be asked, having young children and trying to get a job was difficult due to who would care for the children through the day and would one be available to work late or travel. If one didn't get the job, you wonder if it was due to the children. I applied for a position, actually was asked about who would watch my two young daughters and would I be available in the evenings...I did not get the position and I know it was due to having two young children at the time - the job was for a paralegal position which requires overtime. But then I went to a larger firm and got the position in the blink of an eye and at more money...

Can you even believe people got away with that nonsense not so long ago? Now, I think discrimination against women with kids is such an ingrained, big NO that it is unlikely to even be a factor. Here is hoping the day comes when we can say the same of BK and even credit in general!

[killinstinct]

If you do your Job well, if you are a performer, no one is going to care about your BK. If you are lazy, suck at your job, etc, it won't matter if you filed BK or not.

How is that for some perspective

Focus on what YOU CAN CONTROL, stop worrying about what you can't.

I love this guy. Thank you.

Hope you're right though! For those of us sinking $$ into a second career after BK....

[leena]

I love this guy. Thank you.

Hope you're right though! For those of us sinking $$ into a second career after BK....

As long as that career is not in accounting or retail, I think you will be okay. In any case remember what a wise man here said "if you are not good enough for them, they are not good enough for you".

[helpme2010]

Flamingo gave me the idea to seek out threads like this. I am in a position where I will be graduating with my BSBM in three months. I am in a bad financial position right now as I owe over $50,000 between credit cards and a home equity line of credit. I already have 2 marks against me on my credit report including the home equity loan and my mortgage is listed as foreclosure status (I am currently on my second 6 month loan modification). Discover is threatening to add themselves to my credit report as bad mark #3. They are refusing to extend my 6 month lower payment plan, instead jacked up my price. So I am still paying the same 6 month payment, but they will mark me for this.

When I interview in 3 months, it will be with larger corporations, including some Fortune companies. I will be in a management position. I am scared to death of how my current bad credit or bankruptcy will cause me to lose the job when they run the credit check.

I'm not sure how much worse a bankruptcy will look as compared to having multiple bad credit marks against me by multiple companies over a period of longer than a year.

But I am also worried if I don't consider bankruptcy soon, I may lose a future chance to wipe the slate clean and start over again. What if I do get a job and lose it again in 3 to 6 months? What if a BK judge denies my chapter 7 because I show that I can earn a good income??? It will take a wopping salary to break down this debt over many many many years. I don't know how I can climb out of this hole.

I am just really scared about how I will get a job either with bad credit or BK.

[Fallonedward]

As long as that career is not in accounting or retail, I think you will be okay. In any case remember what a wise man here said "if you are not good enough for them, they are not good enough for you".

This worries me as both the hubby and I are unemployed and are both in finance / accounting field. With having a BK on our record make it impossible to ever get a job again? ugh

[MovingForward]

I have a job in accounting after filing bk a couple of years ago. I am currently in a chapter 13. my current employer did not check my credit report thank God and I do my very best every day and live in gratitude. Also I love that saying "if your not good enough for them, they are not good enough for you". I'm going to remember that!

I will just focus on what I have control over and not worry about the rest. In other words, leave it in God's hands.

[BK2008]

I suppose it depends on where you're applying.

It might matter to a fortune 500 company, that requires a BA to be a file clerk, but to a smaller private employer, your skill set will probably outweigh the bad credit.

After I became unemployed, I was able to find a position (I am also in finance) making more money, better benefits, and just a general all around great job. I did ask in the second interview about background/credit checks, and was upfront about the fact the background was clear (no criminal, drugs, alcohol) but I had a discharged BK from 6 months prior, so my credit was trashed.

Their response: "Everbody's credit is trashed in this economy, this should not be a problem".

So along with that and some glowing references from prior employers, I'm good.

[workingboy]

Employer Criminal Backgound Investigation

Will BK show up if an employer conducts a criminal background investigation? I know BK is not a criminal offense, but if they're checking court records it may get noticed. I lost my job in Jan of 2009. Can't keep up with payments on car or credit cards. After I fax some payroll info to my lawyer, he will file the BK papers.

[HHM]

Will BK show up if an employer conducts a criminal background investigation? I know BK is not a criminal offense, but if they're checking court records it may get noticed. I lost my job in Jan of 2009. Can't keep up with payments on car or credit cards. After I fax some payroll info to my lawyer, he will file the BK papers.

Generally no, a criminal background check will not show the BK.